Hi dear roulette enthusiasts,

Given my professional experience in quantitative trading for the financial markets along with my deep interest in the roulette game and challenge, I hereby post some basic thoughts of mine for your consideration, analysis and discussion based on the forum's general high level of experience and expertise.

1. What type of roulette

I believe that the most robust and backtestable (backtesting is a common concept in algoritmic quantitative trading and easily applicable to roullete dynamics, please google) roullete type is the automatic real mechanical roulette wheel. In other words, the roulette wheel that you can actually see it yourself live at a casino venue however there is no human dealer involved and the spin is originated automatically by a specified mechanism. In such a roulette wheel, the statistical phenomenon whose dynamics the player is trying to predict and thus generate a positive performance are most controlled and unbiased.

The human dealer roulette could be hugely biased by the dealer's style and "hand" and since after a short time, dealers change and new ones come into the scene of the same roulette wheel, the general environment of the experiment is unstable and prone to biases.

Regarding the electronic roulette wheels where numbers sequences are based on computer random generators etc, I believe that by no means should any educated player trust the results of a strategy based on such number sequences; sophisticated algorithms tend to suspiciously favour winnings just at the right time only for players to feel good enough to visit a real casino and face the hard truth of real statistical anomalies under a well structured chaos.

2. The amount of bet

I believe that the fixed bet per spin is the best way to test and analyze if your betting strategy and logic is robust enough. The double on loss, double on gain, fibonacci sequence and all other more complex progression styles of betting may be helpful sometimes in optimising the risk/return ratio of the strategy but they do not and should not make a real difference in the dynamics of the strategy's perfomance. The real difference is made by the prediction of the next spin itself. To rephrase, a strategy must first be robust and successful enough in the prediction side of things (red/black, odd/even, high/low, dozens, voisins/tiers/orphelins, straight numbers etc.) whereas the betting amount and any progression should be a risk management tool just to enhance the risk/return characteristics of the strategy - and not to turn a losing strategy into a winnig strategy. Thus, using a fixed bet on each spin, adds credibility and focuses on the event prediction side of things.

3. The type of bet

In general, roulette offers by default some "50-50" events (red/black, odd/even, high/low) and of same concept bets (sixes, dozens etc) as well as more sophisticated clustered neighborhood bets like voisins/tiers/orphelins; there are also straight number bets.

Which type of bet a playes chooses has to do with the expected payout profile of the strategy, i.e. bet 6 chips on Tiers chips to get 18, bet 1 chip in Black to gain 2 etc. and the general risk profile of the player.

Nevertheless, in any type of bet the strategy is based upon, there should be a simple general rule, just like in the financial markets trading strategies.

Either

Follow the Trend, i.e. if the previous spin is Black (Voisins) , then bet again on Black (Voisins)

Or

Follow the Mean Reversion, i.e. if the previous spin is Black (Voisins) , then bet on the Red (Tiers).

For more sophisticated strategies, there could be an internal indicator that locally turns the strategy from Trend to Mean Reversion and vice versa.

4. Budget and risk metrics

Once the strategy is developed, it should have simple rules that need to be followed strictly under the short amount of time that each spin follows after the previous one. Given the time constraints and the necessity of simplicity, we need to quantify the performance of our strategy by simple statistics.

First we need to state our budget (this will be our initial portfolio value on which we will translate the cash profit or loss into meaningful returns). Lets say there is a cash budget of EUR 500.

Then, given that we have saved the real data of real spins, we can backtest and check the profit and loss behavior of our strategy over time and the data of spins. This exercise generates the most useful statistics for our analysis.

For example

The hit ratio of our strategy; how many successful predictions versus the total spins. This is very useful on the risk management side. For example if a strategy has an overall 25% hit ratio and for some reason during the last 20 spins, the strategy performs a 60% hit ratio temporarily, then it would be safe (than sorry) to expect more prediction misses at the next 20 spins, so that the hit ratio level drops to its normality of 25% (in such a case a player could take the profit and bet no more till the hit ratio resumes normality; and thus saving a lot of lost bets).

The average/max/min net profit on winning spins

The average/max/min net loss on losing spins

The cumulative cash (or return) profit and loss performance over the totality of spins (this creates the most important timeseries for analysis, many many financial statistical tools could be used to decode the strategy dynamics here).

The maximun drawdown of the strategy; how much cash or return % the strategy would lose historically should the player enter and leave the wheel at the worst possible time (spins) window possible. For example if the maximum drawdown in cash of a strategy across 10,000 spins is EUR 340, then a player would feel at more ease should the strategy temporarily is costing a EUR 200 loss as the player knows that this is an event statistically possible and not abnormal whereas if the player is down EUR 400, then something looks very suspicious as the previous historical worst case scenario max loss is breached by EUR 60 (400-340).

I could go on and on such risk/return metrics though I am sure you got the point.

5. The Mystery number 0 and neighbourhood Orphelins

I believe that what makes the difference in a robust roulette strategy is the way the strategy deals with the number 0 (on classic bet types like Black/Red etc) and the Orphelins (on classic Voisins/Tiers etc).

A sophisticated (fixed or dynamic) logic to either include/exclude 0 or Orphelins is what makes the risk/return ratio tilt to the favor of the player or not.

6. Reality

I have spent quite of few hours testing various strategies in real venues on automated real mechanic roulette wheels, most importantly gathering data so that I can get then back home and backtest new and old ideas in search for smooth, robust positive perfromance. Screening between strategies becomes more and more easy as new real data come into place; the surviving strategies depict a resistance in bad temporal spins sequences and are consistently profitable in favourable ones.

No roulette strategy has 100% hit ratio, all strategies have drawdowns and temporal losses - that should be recovered back under a fair amount of time - and most importantly: leave psychology aside and just follow the strategy's rules.

That was that from me for now, looking forward to your feedback and discussion further.

Best of luck across!

Konstantinos